Doesn't it seem it's not just housing - it's EVERYTHING?
I walk down the streets here in London and start thinking to myself "Does everyone have a Ferrari or a Rolls?"
I go out for dinner and look at the wine list and think "Just when did it become normal to pay $200 for a bottle of wine?".
I look at what's being paid for office buildings, skyscrapers, bonds, commodities, stocks, artwork, companies and soccer players, and wonder just how much money is indeed slashing around.
And then I remember that life always (ALWAYS) has a way of washing away excess when it gets out of hand. It just takes time.
Well, it's about time.
"Markets can stay irrational longer than you can stay solvent" yes, and this is the longest and deepest period of irrationality I've ever seen, so I think we all know what's coming. Good luck.
It was more clear to me than ever that we are at a speculative zenith of major proportions.
It is truly remarkable how reminiscent the current minutest is of the 1998-2000 stock mania, when every week would see hundreds of upward price-target revisions.
Having said that, in my opinion the current psychology amongst so-called professionals is even loaner.
In the previous mania, the bulk of the madness was concentrated in technology concepts, especially Internet-oriented ideas, where a company that boasted a handful of eyeballs viewing its Web site could be worth tens of billions.
Today, the insanity is spread out in various different places.
December 09, 2006
Fleck: The evidence grows that the unwinding of the asset bubble is liable to be rapid -- and brutal
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30 comments:
Bring back confederate dollars!!!
Habeas corpus was suspended in August
How convenient!
But we still got Paris Hilton
2007 should be an interesting ride...
Speaking as a person over 60, whose
grandparents were born in the 880's,
whose parents were 8 and 10 in 1929,
who has had to live very frugally most of her life, (ie no credit because a single parent with dependents), and no extra income beyond my own, who had to repair and cook from scratch, who knows how to make many things from the
raw materials.......we are so f'd.
The only thing I hear is how can I
keep doing the insane, unreasonable
(in view of reality) things I am doing, or what else can I leverage
into that will save my a**.
LET ME PUT IT TO YOU BLUNTLY:
IF YOU HAVE TO BORROW IT, OR GET
SOMEONE ELSE TO PAY IT/TAKE ON
PART OF YOUR RISK..............
YOU DON'T HAVE IT.
I was in real estate for 1 year, in 1977,rather unsuccessfully, and glad to leave it; this was when you had to qualify (really) before realtors
would even talk to you. No credit
card debt. Five percent down was
the lowest, 15-20% down common.
I only bring this up to say I know
a little re this area. It is an
obscene travesty visited on the
unsuspecting, culturally brainwashed, and dare I say it,
self-betraying and lazy uninformed
public. Anybody should be able to
multiply out 360 (30years) of payments and see how much they
really pay on a fixed mortgage.Its
an eye opener. Let alone ARM's,
a tool of the evil of Greed. I
remember an article in a union
newsletter in the 1950's warning
people against 30 year mortgages
because of the total cost. ADD IT
UP FOLKS.....Whoops, too late.
My question is, what the h***
do we think we have been doing?
We are completely ignoring almost
everything that matters, or cheapening it, by thinking we can
have more and more for nothing.
By 2009, the Greater Depression.
Learn something basic: how to
garden, repair, sew, cook from
almost nothing, knit, :
GET YOUR HEAD OUT OF YOUR EGO
AND GET GROUNDED.IF YOU ARE IN
DEBT WHAT FOR? Do your children
have coats/shoes/boots for a year
or two's growth? Go get them. Do
you have food put aside? Get 100
pounds of this and that and some
good vitamins. Go into debt for
something that MATTERS! Get your
teens out of the mall, off their
phones, and teach them to cook,
using a stove and not a microwave.
Why? Because the further down the
technology chain you go towards the
past, the less expensive it is and
you are going to need every penny.
Make a noodle from scratch. Better
yet, raise a chicken from scratch for the egg in that noodle.
Check out the Grapes of Wrath, watch
Cinderella Man, and remember that I
said the Greater Depression.
PKK
anonymous 2:07 pm:
Excellent points and post. The movie 'Cinderalla Man' is quite grim and eye-opening should this nation go through another deep recession or depression.
Want to see something really scary?
http://tinyurl.com/ynexzx
Move quietly to the exits.
Cinderella man? We've got cage fighting now... in a few years it will be parents fignting to feed the kids, and yes, that includes the formerly 'liberated women'.
link please
OR . . .we have entered a new paradigm - Globalization is bigger than the industrial revolution and will create massive world wealth (although not spread out evenly). . .The Financial Times a few weeks ago had an editorial about that fact. . .could we not be seeing the forest for the trees???. . .the one thing I still notice is the housing bubble has burst upon the lower middle and middle classes, but the upper classes have not felt a thing. . .the 20% with "world cash" are still buying houses around the world. . .
anonymous 2:07 -
Bless your heart. We are also poor, live frugally, single parent family. Thank our lucky stars, out in the country with small livestock, a couple big mean dogs, and about 10 acres. No mechanization to speak of (except a small, old pickup truck), can't afford it.
We are preparing for life off the grid and without grocery stores. I am afraid it might come to that. If not, we'll have made improvements that will help us anyway.
You folks who've never had to get your hands dirty, learn some survival skills. Anybody in here old enough to remember the civil defense stuff from the 50s and 60s, that's a good start. If you're younger, ask your parents. There's plenty of info on the web.
We went through one of the big storms last year, no power for weeks, unreliable piped-in water supply, no gasoline, stores closed, etc. Money isn't worth much when there's nothing to buy. I consider that time as training for what might be ahead. Except this time the National Guard won't be coming.
Nutso and paranoid? Maybe [shrug]. I'd rather be prepared and considered eccentric than starving and cold.
[ps - I wrote the rant to foxwoodlief in the open thread re "30 years ago."]
Mark in San Diego -
Those who lost it all in the Crash and Depression sure felt it. Some of them were rich before.
Chicken Littles!
Americans are wealthier than ever. The average middle class is about $300,000 Net worth with a mere $18 in debt.
Most people use credit cards for convenience and budgeting purposes.
What's wrong with you people?
The economy is booming, stock mkt is making highs, very low unemployment,etc, etc.
Are you all a bunch of leftest whiners or something?
Correction: I mean $18K in debt.
Re: PKK
Excellent post - I've got Cinderella Man downloaded but the miserableness of it all has kept it well down the list of things to watch when it comes to actually hitting the PLAY button. Perhaps tonight.
I have listened to several authors describing their books on the Depression era on CSPAN2 weekend long BOOKTV these past few months and its quite painful to listen to.
I wonder if there are blogs / websites / wiki dedicated to documenting ( DOCUMENTING, not ranting ) the coming depression in a collaborative style. I'm thinking of serious reporting, facts-checked style documentation. I'd love to contribute. Ideas anyone ?
The best one I've read about the last one in the USA unfortunately only documents the economic twists and turns of events, viz. http://www.mises.org/rothbard/agd/contents.asp
I've never really found concurrent on the spot documentation of the prior Depression that doesn't have a wet-liberal bias, John Gunther falls in the category of wet-liberal. Ideas ?
-K
As long as we still have Paris Hilton, Britney , Linsey, John Mark Carr and entertainment tonight we'll be O.K.!
Don't forget Obama!
how does all the money sloshing around in private equity funds fit into all this?
The only difference between UK and US is the amount of bullshit. These two countries are dead men walking (together), economically speaking.
Manufacturing base gutted, poor production quality, people selling houses and polishing nails for each other. Sure recipe for disaster in the long run.
KB Home's Treasure Coast division had its second round of layoffs in less than six months and may be closing its Vero Beach design center on State Road 60.
http://www1.tcpalm.com/
tcp/business/article/
0,2541,TCP_998_5192565,
00.html
This is anonymous PKK (above) responding to the poster with 10
acres. Boy are you lucky; I envy
anyone with land, and hope to have some one day. They say you can feed 4 on 1/4 acre, wisely and comprehensively gardened, (eg french intensive or?)
To ALL, I recommend reading everything on permaculture you can find and thinking through some things to their logical conclusions.
WHAT IF, REALLY,, what if
we had a terrible oil shortage?
Don't you think it's likely in
your lifetime?
Shoes, clothes, many munitions are
produced overseas, and 40%of food
is shipped in. Fertilizer is natural
gas based. Do you know about solar
cookers? Could you throw one together? Do you know what you need
to eat to keep reasonable health?
Both sets of my grandparents lost their farms in Depression, actually one in 1920's. My mother said they almost starved. My dad's dad was an
urban farmer after working in a
laundry all day and whole family could make and do anything. Dad welded a plow on back of old model A/T and plowed lots for people in
Portland. He hated gardening, but
didn't go hungry. Read up on the
Depressionin UK. People everywhere
ate things like bread and lard, or
milk if they were lucky. Only two
percent live on rural, producing land anymore.
My sister in laws dad went to work at 9. All my parents friends and family dropped out of hschool to work. There aren't newsboy jobs
anymore.....
Could you figure out how to clothe yourself if we didn't have imports? What if food couldn't be shipped in? Did you know our soap is made mostly overseas?
Perhaps most important, would you
be an organizer, a helper, or would
you collapse into distrust?
If you give any credence to mass
behavior, and certainly you have to
given this bubble, how about the possibility the collective unconsious is at work in another
way?
Do you know that in the last 30 some years people have taught themselves
how to spin and weave the finest threads, and many women are now learning to spin on nicely portable
spindles, not just spinning wheels,
make felt and rope again,
soap, mittens and gloves and hats
purses, baby carriers of felt, even
yurts of felt, grow herbs for medicine, even Daniel Day Lewis I
have heard, is a shoemaker.People have learned again to make cob cottages.I work sometimes for a woman who has sold and taught natural dye work for almost 40 years.And then there are home
births, handmade brick bread
ovens, hearth cooking,but you get
my point and I do get carried away.
And then there are the recreation
efforts such as SCA.
What does this keeping alive of old ways that are very fundamental
and essentially not dependent on
oil or electricity say, especially
since this is a worldwide phenomena
quietly going on along side the
cell phone, computer life.( I love
the internet, and it has speeded up the spread of this kind of info.)
Why is there this urge?
Just ask yourselves. How much of this life is built on leverage
(hot air) and credit (a promise,
but in the case of bankruptcy,
lay off, foreclosure, just more
hot air, unfortunately)...
Has your life gone perfectly?
Do you get carried away, make duh!
decisions? Why would we expect
everything to go our way when all
of us have flunked something, been
dumped, crashed a car, ....What
if, this giant pyramid......
teeters....
I have said that I was poor; in fact
I have never felt poor, though the world surely saw me that way. I have felt rich in creativity and belief in the possiblility of human craftmanship if people will call on
it. There is a great deal of satisfaction in knowing you can take
a fleece and turn it into a lovely
coat.
As for the people "buying" houses
or whatever asset under discussion,
my point was, if you don't pay
CASH IN FULL, you haven't BOUGHT
anything, you put yourself in debt
to the total amount of all payments.
You agreed to indenturedness in
effect, haven't you? If you don't
want to address this point, I suggest it's because you are still
looking for the easy way out where
someone else carries the load:
more credit, leverage, mom, dad,
an investor, a renter....Assume
it's you, and only you, just you
all by yourself.....no spouse, no
roommates....How does debt look
then? I've been there, all the
stages.
One day I took out my calculator and added up all the costs of everything I could measure in my life: MONEY, MATERIALS, TIME, ENERGY, HOURS IN A DAY I ACTUALLY FUNCTIONED, NUMBER OF PEOPLE IN MY LIFE TO COUNT ON, THINGS I STILL BELIEVED IN, TIME FRAME TO FINISH THINGS, JUNK TO DISCARD, ETC....
THAT WAS ONE BLAST OF FRESH AIR
AND I NEVER LOOKED BACK. Of course
I don't live a normal American life
anymore.
PKK
Either the entire world's asset bubble pops, and then it could be rapid and brutal, or the wholel bubble continues for a while longer, or it looses steam.
I think what I hate most about many of the apocalyptic bloggers here is no perspective, by which I mean world perspective.
Japan had two of the worlds largest asset bubbles all at one time and adjusted for inflation I think was still higher than our bubbles currently are and Japan didn't disappear.
Then there is Europe. Hello? Remember when people refered to Europe as Eurosclerosis? Take Europe as a whole and add together every nations debts, obligations for social contracts to support its citizens, imports, exports, mortgage debt etc and they don't look any different than Japan or the USA.
I'm sorry but when property prices in Ireland are up over 240% and britain over 190% to the USA's prices up 73% want to talk about asset bubbles? And then take the stock market in Saudi Arabia and UAE, look how obscene their numbers got and then dropped some 40% or the property bubble in Dubai? Talk about Phoenix's surpluss of empty houses?
This isn't to say I don't think there are major reefs out there that can shipwreck the world economy at any moment, wars, derivitaves, real estate and stock price crashes, but even in the worst of times and economic misfortunes countries survive, look at Iraq which actually has a better economy now than under Sanctions inspite of the war, Argentina who was threatened that if they defaulted they'd never see another dollar from the international community and they have recovered from their crisis and are growing at some 7-8% a year now, to the Asia crisis, Thailand surived, Japan survived. Britain? With the collapse of their empire and the run on the sterling in the 50s, loss of competitiveness etc, they survived and their citizens are as in hock to debt, overpriced real estate as any nation and yet no one is harking the demise of England.
"hen there is Europe. Hello? Remember when people refered to Europe as Eurosclerosis? Take Europe as a whole and add together every nations debts, obligations for social contracts to support its citizens, imports, exports, mortgage debt etc and they don't look any different than Japan or the USA."
Oh fuck off, you do not know jack shit about Europe. We are not the one with 70 percent of outbound containers empty, like in the case of LA habour.
You Americans are just full of shit and overpriced houses. I would not buy anything with label "Made in USA" but I will buy a lot of stuff "Made in Germany".
Hello annoymous but I lived in Europe for three years and visit often. Paris today is not the Paris of 20 years ago. Much dirtier and definitely more expensive. You can travel all over Europe and find that you will pay 2-300,000 Euro for 800 sq ft and don't tell me all those over priced european homes are because they have lots of industry and high paying jobs. Lot of tourism but outside of a few major industrial belts things are tough. Of course you want cheap German? East Germany still offers lots of houses in villages where unemployment is 30% or higher for under 100,000 euro but trying paying for it without a job.
As for made in Germany? Most German autos you by here in the USA are not made in Germany but south America or Mexico and soon China. As for modern craftsmanship? Outside a few well made items a lot of German items are no better made than here in the USA let alone China. As for homes? I lived in new homes in Germany and was shocked at the lack of refinement. Lot of houses built out of concrete and have paintable wallpaper, conduits for electric running outside on the walls, finish work not very exciting and for that you pay a lot of money in Euros.
Of course there has been a flatlined home market there for as long as the Japanese have had a flat market but then 20 years ago homes there were extremely expensive and like Japan, just because they have remained flat for 20 years doesn't make them cheap today, just less expensive to the Germans or Japanese, kind of like what may happen here.
Why so many empty containers in LA? Probaly because many of them are filled with illegal chinese immigrants...oh, sorry, chinese imports. Europe is just now fallen prey to Chinese imports and in five years they will have the same negative balance sheet with China. Germans, French, Italians can't compete any more that we can with chinese slave labor.
And their governments are selling out their citizens just as quickly as ours did in the name of profits. They are building state of the art car factories, agreed to build part of the Airbus there and export their areospace technology, all in the name of free trade and getting a toe in China while China steps all over Europe.
You say, "You Americans" like you're not one? How would we know with your annonymous post. Sounds like a twisted line from an Indiana Jones movie.
Lots of American products are well made. We build great aircraft, ships, military hardware, computers, chips, even our autos are very well made and nice looking if not so fuel efficient. We build great roads, nice skyscrappers, tractors and trucks. GE makes wonderful products from medical items on down to engines. Motorolla makes great products as well. The list goes on and on about great products that we make.
Sorry if you feel you need to spend $500 on a wallet with a european name on it made out of plastic as if that is quality.
Sounds like you have issues with hating yourself, your people, your culture, your nation. Apparently you don't know how to distinquish what is good about this country with what needs to be fixed. I imagine you believe all Jews evil, all Muslims terrorists, all Americans bad tourists. You can't distinquish the good from the bad.
squish! the sky is falling SQUISH! THE SKY IS FALLING. jts all manipulated by the 1% who own 90% of the worlds wealth, and it to is an equal oppurtunity, oppurtuniy ,dammit
I lived in new homes in Germany and was shocked at the lack of refinement. Lot of houses built out of concrete and have paintable wallpaper, conduits for electric running outside on the walls, finish work not very exciting and for that you pay a lot of money in Euros.
Steel reinforced concrete? (I'm sure there's rebar in there)
Much much better built, insulated, and likewise more expensive than the transitory fiberboard stickboxes that US corporate homebuilders make.
Of course the conduit is on the outside, because you can't drill nice holes in concrete because it's damn strong. Serious industrial buildings in the US are made the same way. And this way you can actually fix your wiring.
Germans seem to have their priorities straight: maintainability and longevity instead of illusory pretty-pretty.
And their governments are selling out their citizens just as quickly as ours did in the name of profits.
No, not as quickly, and people fight it.
And Germany just had record trade surplus in high tech manufacturing, despite unions and 6 week vacations and universal health care.
Lots of American products are well made. We build great aircraft,
OK
ships
military only on government contract, no commercially competitive shipbuilding left
military hardware
sure, but very expensive
computers
99% of components made in Asia, and 75%-90% designed there.
chips
The US-designed Pentium 4 sucked ass (Intel fired its experienced engineers and replaced them with cheap H1B's). The Core 2 comes from Israel, and produced all over the world. Almost all other global chips come from Asia.
US makes good supercomputers, but only due to totally uneconomical military/intelligence-oriented contracts.
even our autos are very well made and nice looking if not so fuel efficient.
Only the ones that say "Toyota" and "Honda" on them, and even still the same model made in Japan is better. When will they make a Lexus in the USA?
We build great roads,
Ever been to Western Europe? Our roads suck ass. They drive 90 mph.
nice skyscrappers,
uh, since when? We can't fill a hole in NYC; all the really good ones now are in Asia.
tractors and trucks.
real industries of the future?
GE makes wonderful products from medical items on down to engines.
How many in USA?
Motorolla makes great products as well.
99% asian with a US name.
What US does do well at:
biotechnology, but that's an expense to the health care system, not something which increases productivity and wealth
internet services
animated movies
slick propaganda
video game software
steroided footballers
fraudulent lending
What US does do well at:
The US also makes the world's top shelf porn films.
Movies like 'Fade To Black' have international acclaim over like works in Europe or Japan. I believe that the US will continue to be an innovator in this regard.
You'd be surprised at how popular porn is in Islamic countries behind closed doors, and prostitution, so we can exchange porn for oil.
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